Bernanke doesn't know what to do...but the plunges ahead anyway

Straight from the "frequently wrong but never in doubt" school of thinking, our esteemed chairman continues on his endeavor to make us just like Japan by avoiding repeating the mistakes of the Japanese.

As the prepares to deploy his latest weapon "Operation Twist", some are already pointing out that it will not help the unemployed (Bernanke’s Next Easing May Not Aid Jobless Americans ). 

So, why is he doing this? Because he wants you to buy stocks, that's why! The fact is that, for all their technical econometric babble about interest rates, the Fed manages monetary policy by targeting not M1, M2, or any monetary aggregate as one would think by reading their explanations.  Instead, since Alan Greenspan tasted success in 1987, the Fed has been targeting the stock market.

As fate may have it.  The creators of the model Bernanke is following  have also done the same, to no avail.

Here is how the Japanese did it, we are right on track:

1) Ignore a real estate bubble.  No matter the size, everyone is happy.
2) After the bubble burst, save the banks at any cost.  Pretend is the only way.  The bankers are happy.
3) In order to let the banks recover, drive rates to zero on account that it will spur economic growth (a few bankers and financial agents are happy)
4) Give up all pretense of a capitalist system and authorize the central bank to buy anything.  Forget Bonds, Bank of Japan Buys Stocks

In case you think people who own stocks in Japan are happy with (4) above, I suggest you take a look at the following chart: